Clients, Non-Payments and Slow Growth – Is it time for the Middle East’s PR Industry to work together?

A couple of stories broke over the past couple of weeks in the Middle East’s PR industry. This wouldn’t be unusual if it weren’t summer, when little happens. The first piece was the news of additional job losses at Edelman Middle East. The second was the restructuring of FleishmanHillard in Saudi Arabia due to final losses. And the third, which didn’t register in the media, was the closure of a one-person PR agency in Dubai.

There are two issues at play here. The first is management. Edelman’s layoffs aren’t a one-off; the company has made repeated redundancies over the past couple of years, and I feel for all those who joined what is the world’s largest independent PR agency, only for this to happen. Edelman has struggled in the UAE and the wider region, even after the purchase of one of the country’s largest privately-owned agencies, Dabo & Co, in 2015.

The second issue is payment, or a lack of. To quote from the Gulf News piece on FleishmanHillard:

The non-payment of fees, apparently due to a lack of invoicing clients, has impacted their operations forcing the company to reduce their headcount in Riyadh.

The issue also caught the eye of the head of one of the largest agencies in the region. Writing on his LinkedIn feed, Sunil John shared his view on the need for cross-industry action to address non-payment, particularly by governments.

SunilJohn

Slow to No Growth

Let’s give a little context to the PR industry across the Middle East. Over the past two years economies in the Gulf have struggled. Saudi has been in recession for a number of quarters. The UAE’s economy is growing slowly. The fastest growing economy over 2017 was Qatar, with a GDP growth of just over 2 percent. While this may not look particularly bad for those in Europe, many of us in the region can remember a time a decade back when economies were growing double-digit. Slow to no growth is the new norm in the region, and we (and management outside of the region) have got to get used to this, and budget accordingly.

Government Spending Grows

Ironically given lower government spending over the past two years on the back of falling oil prices, the driver of PR spending has been government. Saudi in particular has been spending heavily to transform its reputation globally. I’ve seen a host of medium and large agencies flock to Riyadh to work on Saudi’s Vision 2030, as well as other projects. Political circumstances have resulted in significant sums being spent in both London and Washington. For agencies starved of growth from business, government spending has been a boon.

Payment Terms and Governments

The challenge with government accounts is payment – both payment terms and collection. Government accounts are rarely small, and I’ve heard of terms that can be as long as six months. That’s a long time to wait for payment. And then, there’s the issue of payments being made on time. In my knowledge, it’s rare for a government to pay a bill on time. And if they don’t, what’s the recourse? There’s no higher authority to appeal to, no court you can go to. You chase and chase and chase. And hope you get paid, sooner rather than later.

Is Industry Action Going to Happen?

Sunil John’s call to action is interesting, but it’s not new. I and others have discussed the idea of having non-payment lists with industry bodies such as the Middle East Public Relations Association several years back. My heart desperately wants the large agency heads to come together to agree on what action to take when it comes to black-listing accounts (the WPP agencies could easily take the lead, given the size of their business here). But, despite the hurt the industry is going through, my head say this won’t happen. For every agency that drops a non-paying account, there are ten lining up to pitch. Everyone thinks they can do better on payment.

Sadly, I think there’s a bigger issue at play which doesn’t just affect the PR industry (to give you an example, Saudi’s construction industry has faced payment delays of up to 18 months). The answer is collective action. And it’ll require true leadership from everyone on the agency side, as well as leaders on the client side calling out this behavior. Is anyone ready to make the first move?

Lessons on media relations and transparency from the World Government Summit

Dubai's World Government Summit has become a global event for government employees and is closely followed by the media (image source: Trade Arabia)

Dubai’s World Government Summit has become a global event for government employees and is closely followed by the media (image source: Trade Arabia)

This month was host to another mega event in Dubai, the World Government Summit. The conference, which even hosted an address by President Obama, aims to become the leading platform for governments, the private sector and the public to learn about and collaborate together for innovation in government.

Two areas caught my eye. The first was that of media relations. There’s been a good deal of talk about how the communications industry is changing and media relations will become less important. That isn’t the case, at least for the vast majority of us who spend most of our day pitching, preparing for media interviews, and following up.

There was a sizable media presence at the event, which is testament to the World Government Summit’s global reach. However, while there were dozens of international journalists – whose flights and accommodation were paid for – the story for the local journalists I knew was different. Few Dubai-based media were reached out to except by email, with no phone calls. And some didn’t receive an email to arrange for registration. One journalist I talked to spoke about his frustration on having to chase the agency to get his registration sorted out. He was particularly peeved by a lack of support or empathy from the agency about the issue, and not only him but his whole team being missed out. As he told me, ‘a sorry would have gone a long way when it comes to good will.’

While I understand the urge to engage globally – after all, the event is now the World Government Summit – not involving local media is a idea that will only sour the agency’s relationship with the local journalists in the short to medium term; and trust me, you don’t want to deal with an aggrieved journalist, let alone put them in front of a client. Plus, in today’s digital age, I don’t buy this concept of local and global media. Everything is online, and much of it is curated by services such as Google News. It’s now a case of getting that content seen by the relevant stakeholder, which can be done through increasing paid reach or seeding the content on other sites.

Transparency and its impact on credibility

The second insight is around the inaugural “World’s Best Minister” Award. According to the summit’s website, the “World’s Best Minister” Award was “thoroughly and independently managed by Thomson Reuters where the search for the nominees is conducted according to the established criteria”.

To quote from the Summit’s website, details on the criteria and judging panel are below:

The criteria of the Award were set by the organizer of the World Government Summit. The criteria for selecting the candidates WAs based on various financial and non-financial metrics, and their improvement over time. These are based on data disclosed by the World Bank, United Nations, Legatum institution and various other well known resources that provide data and statistics on economic information, social metrics and government services.

The primary focus for 2016 has been on initiatives in the healthcare, education, social and environmental services.

The judging panel consists of six judges from various backgrounds, who provide different perspectives on the candidates based on their experience, expertise and insights. They include senior executives from the World Bank, OECD, Ernst & Young, Strategy & Co and the Abraaj Group on their personal capacity.

From an initial selection of 100 ministers, the winner turned out to be Greg Hunt, Australia’s environment minister. This choice has proved to be highly controversial, particularly in Australia where the Australian government has been criticized for its approach to green issues.

My focus however is the response from Thomson Reuters who, I feel, have sought to distance themselves from the choice of the winner. To quote from the Guardian.

But Thomson Reuters said it was “not correct” to say that the company initiated the award or were responsible for designing the selection process.

“Thomson Reuters was solely responsible for assisting in the administration of the award, to a set of criteria approved by the World Government Summit organisers,” said Tarek Fleihan, head of corporate communications for the financial information company in the Middle East, Africa and Russia.

Transparency is key to credibility. And whilst I do love the idea of awarding government officials who innovate on behalf of their citizens, the controversial choice and the ensuing contradictions surrounding the process hasn’t helped to make the award as credible as it should be.

What are your thoughts? Were you at the event? I’d love to hear your views on these two points.

A role model from the GCC’s government sector, Dr Saleh Al-Awaji

I’m not easily impressed, and I don’t often give compliments. It’s a character flaw of mine. However, every now and then comes along a person who amazes me by their determination, their work ethic, and their belief that they can make a difference.

One of those people who I have not only had the absolute pleasure to meet, but actually to work with is Dr Saleh Al-Awaji. Dr Al-Awaji is the Deputy Minister of Electricity and Water. Not only that, he is the Chairman of Saudi’s electricity provider, the Saudi Electricity Company.

Now, usually senior government officials can be heard to reach, they’re surrounded by their staff, and they are difficult to talk to. When or if you do get the chance to talk to them, don’t expect more than a couple of lines before they move on to their next engagement.

To me, Dr Al-Awaji is everything that a government employee should be. He’s incredibly hard working (how many times  have you received an email from a GCC government official out of office hours) and he’s passionate about what he is doing. I’ve always been struck by Dr Al-Awaji and his determination to make a difference through his work. He’s also eloquent and knows more about the energy sector in Saudi than anyone.

Have a look at the gallery below to see more about Dr Al-Awaji and what he is working on. We need more government officials like Dr Al-Awaji. I for one am grateful for knowing and having worked with the Deputy Minister and Chairman of Saudi Electricity Company. If you’re interested in Dr Al-Awaji’s full bio then go here (yes, he even has his own website!).